Golden State Mutual Life Insurance Co., the Los Angeles-based company that failed to make a profit for five straight years, was seized by California regulators after the insurer sold assets to cover losses.

Golden State, which operates in 12 states, was served an “order of conservation” and must stop selling new policies immediately, Insurance Commissioner Steve Poizner said today in a statement. The regulator will oversee payment of claims and receipt of premiums as it winds the company down.

“For the protection of its policyholders, the company has been seized to prevent continuing financial deterioration,” Poizner said in the statement. The insurer was “repeatedly warned” that it faced conservation, he said.

Life insurers have reported losses and profit declines in the past year as investments they hold to back policies fell in value. A.M. Best Co., which rates the ability of insurers to pay claims, said in May the investment losses will cause an increasing number of companies to be seized by state regulators this year and next.

Golden State ranked 103rd in life insurance sales in California in 2007, according to data from the National Association of Insurance Commissioners.

Andreas Flinck, a spokesman for Golden State, didn’t immediately reply to a call and an e-mail requesting comment. Poizner’s office said Golden State has indicated it won’t oppose the takeover.

The company, which had capital and surplus of $1.65 million at the end of June, was required by regulators to have more than $5 million. The insurer has had “significant” operating losses in each of the last five years, the California regulator said. Golden State wrote direct premiums of $5.4 million in California last year, Poizner’s office said.